Fighting Continues in Ukraine While MH17 Has Elusive Consequences for Russia

2 Ukrainian Su-25 close support jets were downed by pro-Russian rebels yesterday. Given their flight profiles, MANPADS are a likely culprit. Artillery and rocket fire has also been reported in several places, including coming from Russia according to the (pro-Kiev) Kyiv Post.

The EU’s foreign ministers met to discuss sanctions against Russia but the Netherlands are stalling as their prime minister wants to recover the bodies of those who died aboard flight MH17 before assigning blame.

Echoing concerns voiced in Germany, MPs from the UK’s House of Commons want the executive’s arms exports policies under greater parliamentary scrutiny and control. They just released a report [PDF] on this topic. Russia’s RIA Novosti takes their now usual approach by taunting Western powers with their own contradictions: UK Continues Exporting Arms to Russia Despite Call for New Sanctions.

RIA Novosti also notes that Russia will continue to supply space rocket engines to the US… as long as these are lucrative contracts. Well done, Komrade Kapitalist! Russia is also quick to remind France of its contractual obligations, after President Hollande said he may reconsider authorizing the delivery of the 2nd Mistral ship.

Ambrose Evans-Pritchard from the Telegraph ties Europe’s lack of nerve for sanctions to the Euro zone’s lasting economic slump. So far it is hard not to conclude that Vladimir Putin is going to get away with murder.

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More Q2 2014 Results

Boeing’s 2nd quarter sales [PDF] barely grew (+$0.2B) to $22B, held down by a 6% decline in defense and space sales to $7.7B. Orders were even lower at $6B (78% book-to-bill) which puts the backlog at $63B. Their earnings took a hit because of challenges with the KC-46A program.

Q2 sales at Raytheon declined by 6.8% to $5.7B, but they had a much better 1.19 book to bill ratio this quarter. The total backlog of $33B is 71% funded, and while $1.4B higher than a year ago, it’s still lower than at the end of 2013. Integrated Defense Systems (IDS) fared most poorly with sales losing 10% from a year ago. Raytheon’s 4 main divisions are now tied at about $1.5B in quarterly sales each ($410M costs at the corporate level explain why this doesn’t add up to $6B+ in total sales for the quarter).

Northrop Grumman reported quarterly sales down 4% to $6B. Aerospace and Information Systems declined most, at -4% and -8% respectively. Total backlog at the end of the period was $35.6B (62% funded), $1.5B less than 6 months ago.

Françoifrique

The Economist reviews the efforts of President François Hollande to reorganize France’s presence across Africa, following in the steps of his mentor François Mitterrand and predecessor Nicolas Sarkozy. France is haunted by the memory of the Rwandan massacre 20 years ago, and would like to preempt terrorist threats at the root. The big missing piece: sustained funding that backs up policy.

Belly Flop to the Pacific

US Army Chief of Staff Gen Odierno spoke at the Aspen Institute to discuss the role of his service to meet current global threats. During the Q&A part at the end he put the emphasis on the word “rebalance” to answer a question about the formerly-known-as pivot to the Pacific. He’s happy with how things have been going for his own service but thinks proper allocation of aircraft carriers between the Middle East and the Pacific is a more touchy issue. Video below: